Tags: ChexSystems | banking | track | account

CNNMoney: Your Bank Might Be Tracking You

By    |   Friday, 17 Aug 2012 11:36 AM

Bank customers beware. A little-known, but massive, database maintained by ChexSystems could be tracking your banking behavior and determine your banking future.

ChexSystems allows banks to report the bad behaviors of customers. And, CNNMoney warns, you can be denied a checking account because your bank can find out in an instant if you've bounced too many checks, owe money on an overdrawn account or engaged in fraud.

Much attention is given to fairness and protection in the banking system, but the concern is usually for consumers.

Editor's Note: Unthinkable Haunts Investors: Evidence for Imminent 90% Stock Market Drop. 

As Bloomberg points out, consumer advocates and lawmakers have long criticized overdraft protection as a system to build profits not protect consumers.

But, when customers abuse their accounts with unpaid overdrafts or by committing acts of fraud, banks can incur losses. ChexSystems helps prevent customers from skipping from bank to bank with bad practices.

CNNMoney says the company provides consumer reports to 80 percent of the country’s banks and has data on more than 300 million consumers.

It works much like a credit-reporting agency, collecting information, such as history of accounts closed for abuse or even history of payday loans, which is usually held for five years. Individuals are also assigned a score, which can range from low (100) to high (899).

Millions of people have been blocked from opening checking accounts because they were flagged as high risk, CNNMoney reveals.

Sometimes scores are not low enough for people to be denied an account altogether, but might instead warrant a bank to offer an applicant a special type of account with increased supervision or limited to no frills.

Some are concerned about the lack of regulation for a company like ChexSystems. The fate of peoples' financial future is based on the accuracy of its database and on its practices. Yet, it operates without regular government supervision or audits.

“The people who are denied fall off the mainstream credit and banking map and join the ranks of the unbanked,” Chi Chi Wu, an attorney at the National Consumer Law Center, tells CNN Money.

Excluding millions of Americans from traditional banking services is not an efficient means of commerce and will result in long-term negative consequences for our economy, banking analyst Meredith Whitney wrote in The Wall Street Journal.

Editor's Note: Unthinkable Haunts Investors: Evidence for Imminent 90% Stock Market Drop.

© 2017 Newsmax Finance. All rights reserved.

 
1Like our page
2Share
397
2012-36-17
Friday, 17 Aug 2012 11:36 AM
Newsmax Inc.
 

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

NEWSMAX.COM
MONEYNEWS.COM
© Newsmax Media, Inc.
All Rights Reserved